If you have ever heard me speak or teach about saving money, then you have undoubtedly been introduced to on-line banks. I’m not talking about banks that have websites but about banks that have little to zero physical “bricks & mortar” locations.

I’m talking about banks like Capital One 360 (formerly ING Direct) and Ally Bank (built on the base of GMAC).

Here’s why I use on-line banks (over a local bank) for my savings accounts:

1. Better interest rate On-line banks pay interest that is generally 5 to 8 times more than a local bank savings account (somewhere near that of a 2 to 3 year CD) – but it doesn’t affect the liquidity of my money
2. Sub-Accounts If you have a regular savings account, all you can see is a total amount of the money the account currently contains. With on-line banks, you can create something called “buckets” or “sub-accounts” to give every dollar a designated name! This means you can create sub-accounts like “Christmas”, “Emergency Savings”, “Vacation”, “Life Insurance”, etc. See the example screen shot below from my Capital One 360 account. You can click the image to see a larger version. This makes it so much better!
3. Automatic Savings You can establish automatic transfers from another existing bank account. In the example I show below, I have set up automatic transfers for my emergency fund, YMCA annual membership, House taxes and insurance, Christmas, and life insurance premiums. It is a “set it and forget it” approach to savings that is awesome!
4. Customer Service  Because these banks only have an on-line presence, they have to be INCREDIBLE at customer service, or people would not even know about them. Every interaction I have had with my on-line banks has been an incredibly positive experience.
5. FDIC-insured  These banks are insured by the FDIC – just like any other bank. That means your deposits are protected. I like that!
6. No fees  There are no fees unless you exceed the monthly allowable transactions (or something extraordinary like that)
7. No MINIMUM balance  This makes it perfect for any and every saver.

I encourage you to check them out: Capital One 360  and Ally Bank.

Set a savings goal. Then establish an automatic savings plan to help you accomplish it!

Do you use any of these banks? What do you like about them most?

Disclosure

Most people struggle to save money. There are so many urgent and important items that compete for every single dollar in our wallet.

The kids are constantly growing out of their clothes, something in the house is continually breaking down, and the car seems to have a ravenous appetite for money. These are all items that consume our money, but the largest competitor for savings in most people’s household is FOOD. In fact, when someone completes their first-ever budget, they begin to review their actual spending patterns and nearly always come to the same conclusion that they’ve been spending way to much on food. They summarize their discovery by stating something like:

“I’ve found out where my savings account is – I’ve been eating it!”

I discovered this truth when I did my first budget way back in July 2003! The realization is as stark today as it was then. I was literally eating my savings (and my future)!

There are many ways to reduce your food costs (and I would love for you to share your great ideas with us all in the comments!):

1. Don’t go to the grocery store when you are hungry!
2. Split a meal with someone else while at a restaurant.
3. Use cash envelopes
4. Shop the sales at the grocery store!
5. Use coupons (but buy things you will really use!)
6. Make dinners from scratch (healthier and brings family together!)
7. Designate one week as a “We’re eating all our meals using stuff in the pantry this week!” (you will quite possibly have the most interesting meals you’ve ever had!)

Readers: What additional ideas would you share? Click HERE to share in the comments!

Read recent posts

I have been using BigCrumbs.com since 2010 (November 8, 2010 to be exact), and it has given me back $283.42 of my on-line purchases.

Here’s how it works:

1. Create an account at BigCrumbs.com
2. When you are going to shop on-line, visit the BigCrumbs.com website and in the search window at the top of the page, type in the on-line retailer you are going to be shopping with (like Expedia.com, Target.com, Walmart.com, etc.)
3. It will generate a link for you to click on to begin shopping.
4. Shop on-line (using promo codes from sites like RetailMeNot.com, of course )
5. That is all there is to it!!!

Here’s how this gets you money back:

1. Stores pay commissions to websites for generating traffic to their on-line site
2. BigCrumbs.com chooses to share some of that revenue with you and me!
3. When you click on the link provided by BigCrumbs.com, it “sets a cookie” on your computer that communicates to the on-line retailer that BigCrumbs.com generated traffic for them.
4. When you purchase something, the retailer pays a commission to BigCrumbs.com.
5. BigCrumbs.com pays you a portion of that commission!

Awesome! SIGN UP here and start getting some of your hard-earned money back!

Read recent posts

Here are 5 things you can do to save big-time money in 2013:

1. Have high interest credit card debt? Roll over the balance to a 0% balance transfer credit card. It takes five minutes or less and can change the interest on your credit card debt for a year or longer! Here is my list of great 0% Balance Transfer Credit Card Offers.
2. Haven’t checked your auto and homeowner’s/renter’s insurance rates lately? Insurance companies tend to creep their rates up over time. Many times you can end up with better insurance for way less than you are paying right now! I like to use an on-line quote site to get quotes. I type in my information one time, and all of the insurance companies start competing for my business! That means lower prices, and I like that!
3. Have you checked your home mortgage interest rate lately?Rates have fallen to record lows. Chances are pretty good that a simple refinance of your house would allow you to cut 5 to 10 years off of your mortgage while still paying the same payment!
4. Cut the cable/satellite service for one year. I have done this before, and we discovered our family had a LOT more time to spend together doing something other than staring at the TV. It also helped us save a lot of money!
5. Establish a savings goal and set up an automatic draft to a bank account that is not immediately accessible. I really like Capital One 360. It is where I keep my savings that I want to ensure I keep my hands off of!

Hope this list helps you have the most prosperous year ever!

Read recent posts

A friendly reminder from your corner personal finance website, JosephSangl.com:

As of today, July 20, 2012, there are 158 days until Christmas.

Have you started saving?

More specifically, have you started saving for the following?

• Presents
• Christmas travel
• Christmas Cards
• Postage
• Decorations
• Giving to the less fortunate

Even better, have you begun shopping for or making the presents you will be giving away?

I know that I obtain much better deals when I am not under time pressure.

Jenn and I save for Christmas every single month because it is a Known, Upcoming Expense.  We also save for other Known, Upcoming Expenses like vacation, annual insurance premiums, etc.  We used the Known, Upcoming Expense Calculator to determine how much we should save each month/pay period.  You can too –HERE.

Read Recent Posts

One of the largest issues I see during our one-on-one financial coaching meetings is the inability to save money.

Here are some facts about saved money:

• Saving money is essential to long-term sustainability
• Saved money relieves stress
• Saved money allows you to take a chance
• Saved money allows life to happen (job loss, disability, pay cut, injury, etc.) without going broke!

But you already knew that part.  We all know that we are supposed to “save money for a rainy day.” Yet, even though we KNOW how important it is to save money, most people fail to do so.

My hope with this blog post is to challenge YOU to take a next step. If you have negative savings (no money plus overdrafted accounts and debt), the goal is to bring you to zero.  If you are at zero savings, the goal is to get to at least $2,500 in a beginner emergency fund.  If you have been able to save a substantial amount of money, it is my hope that you will participate in the discussion and share your own tips that have worked well for you.

Automatic Draft From Paycheck

Establish a savings account and have the money drafted from every single paycheck.  Whether it is $25 or $250 per pay period – just SAVE!  You KNOW that the car is going to break down.  You KNOW that the school is going to send home a surprise expense.

By establishing this draft, it allows the money to be “out-of-sight.”  When money is out-of-sight, it can be out-of-mind.  This allows the account to grow without you robbing it!

Now, I personally had a problem with this when I did not have a monthly budget.  I would ROB my own savings account about 2.1 microseconds after I was paid.  Only after I had a plan developed together with my bride, Jenn, did my savings account begin growing in a healthy manner.

Create An Escrow Account For Known, Upcoming Expenses

For those unfamiliar with an escrow account, it is a savings account that is established by a mortgage company.  The mortgage company totals the annual cost of property taxes and homeowner’s insurance and divides it by the number of payments being made each year.  The mortgage company then pays for the taxes and insurance from this escrow (savings) account.  For example, if the property taxes are $1,200/year and the insurance is $600, then the total amount needed each year is $1,800.  The mortgage company will collect $150 extra with each monthly payment to place into the escrow account.

An escrow account smooths out the cost over a year – instead of having to pay for it all in one month.  It tightens the monthly budget, but having a fully funded escrow account sure is AWESOME when vacation arrives and the money has already been saved to pay cash for it!  Those who have a mortgage with an escrow account will testify to the fact that they never worry about paying for the taxes and insurance – ask someone!

Take a moment to read THIS POST about how to calculate the amount you need to save each month for your known, upcoming expenses.

Take it from one who has lived it – if you do not plan for your known, upcoming expenses, your ability to save money will be tremendously hampered!

How about you?  What are some ways you have made saving money easier in your own finances?

Read recent posts

NOTE: I hold my Known Upcoming Non-Monthly Savings in an account at Capital One 360. It allows me to save money “out of sight – out of mind” and allows me to create “sub-accounts” for each item I am saving for. For example, I have created a “Christmas” and “Car Replacement Fund” in my account. You can check out Capital One 360 HERE.

Margin. The very word speaks strongly.

In writing, margin means “space.” Teachers tell us to leave margins and “don’t write in the margins.”

For any individual or organization to last, maintaining margin must be a priority. Here’s why – you will experience economic downturns. If financial margin has not been established, it can cause immediate financial issues and even jeopardize the solvency of the individual or organization.

There are two types of margin every person or organization should have in place.

1. Cash On Hand Savings (Financial Reserves)
   
2. Monthly Savings (Operational Margin)

1.  Cash On Hand Savings (Financial Reserves)

Having money in the bank allows you to focus on your mission instead of exhausting yourself by determining the steps necessary to keep the doors open and the lights on. Financial reserves also allow you to ponder future opportunities to expand or grow your business or investments. Cash on hand also allows you the opportunity to encounter surprise expenses without worrying about how you will pay for them. In short, cash on hand allows you to sleep a lot better at night!

GOAL: 3 months of operating expenses

2.  Monthly Savings (Operational Margin)

This type of margin is created by managing your costs such that you are able to add money to the bank account each and every month. This is what happens when you have a profitable organization or life. This type of margin allows you to know that current bills will be paid without having to erode financial reserves and to also fund future dreams!

GOAL: 15 to 20-percent profit margin

If I were to have a choice of one type of margin, I would choose #2 – Monthly Savings because I would be able to immediately begin funding #1 with the surplus profits!

Where are YOU personally when compared to this goals? Where is YOUR ORGANIZATION in relation to these goals?

Read recent posts

In my book, I Was Broke. Now I’m Not., I share three things every person should save for and HOW to achieve it. You can purchase HERE or acquire a Kindle Version HERE.

Here’s a savings tip that be a lot of fun and a serious challenge if taken seriously – Go on a spending fast and give or save the difference.

It’s a simple concept.  Stop spending money on a specific item for period of time, and deposit the money that would have been spent on that item into savings or give that money away.

Here are some examples:

• Stop buying soda (or pop or Coke or whatever you call it) and redirect the money to savings
• Refuse to purchase any new clothes for an entire year and redirect the money to savings
• Eliminate the daily $4 coffee drinks (gasp!) and redirect the money to savings
• Park the car and ride a bike to work for a month and redirect the money to savings

A young lady I met a year ago embarked on a journey just like this.  Her name is Sarah, and she resolved to “not buy anything new for 365 days.”  Her year-long quest began on March 21, 2011, and she is about to finish her journey. On March 21, I will be posting the blog post that I asked her to write.  You won’t want to miss it.

QUESTION:  What will you choose to go on a spending fast for?  What will you do with the money that would normally have been spent on that item?

I’ll reveal my spending fast goal next week.

Read recent posts